But the IAEA's technical report and the interpretations of its findings are spinning into an overheated strategic standoff between Western nations, Israel, and Iran that, analysts say, may become reason for a military strike against Iran.

Even as Europeans expect to offer Iran an upgraded incentive package to suspend uranium enrichment in the coming weeks, analysts say that cherry-picking of quotes and Western spin, coupled with "breathless" media reporting about Iranian recalcitrance, could point in a nondiplomatic direction.

Even Democratic presidential candidate Barack Obama, who says the US must engage Iran with "strong diplomacy" – and told AIPAC Wednesday that this would enhance Israel's security also – said the "danger from Iran is grave," and that he would "do everything in my power to prevent Iran from obtaining a nuclear weapon – everything."

Iran's supreme leader, Ayatollah Ali Khamenei, in Tehran's most vehement denial yet, said Tuesday that Iran "is not seeking a nuclear weapon," which would "only incur high costs and have no use. They do not bring power to a nation."

"We are seeking nuclear energy for peaceful purposes for daily use and we will continue this path to the envy of our enemies," said Ayatollah Khamenei, adding that Iran opposed the bomb "in principle and on religious grounds."

Iran has not suspended uranium enrichment, as required by a UN Security Council resolution, and is under three UN and one US set of sanctions. But Ali Larijani, Iran's former nuclear negotiator warned that parliament, of which he is the new speaker, could "limit" cooperation with the IAEA if the West continues "kicking around Iran's nuclear case."

At issue in Vienna is the meaning of 18 documents that point to secret weaponization work, which the IAEA calls "alleged studies." Most were provided by US intelligence but were only shown, not given, to the IAEA and to Iran, which dismisses them as fakes.

Those studies "remain a matter of serious concern," and Iran "has not yet agreed to implement all the transparency measures required to clarify this cluster of allegations," IAEA chief Mohamed ElBaradei told the agency's 35-member board of governors when they convened on Monday.

But Mr. ElBaradei also indirectly rapped the US, noting that the IAEA "was unfortunately not authorized to provide copies [of the documents] to Iran," which he said "would clearly help the Agency in its investigations." The IAEA, he added, "has not seen indications of the actual use of nuclear material in connection with the alleged studies."

Those include designs of the nose cone of a Shahab 3 missile – Iran's longest-range ballistic missile – modified for a possible nuclear payload; schematics of a 400-yard-deep underground testing setup; and documentation that appears to show secret nuclear projects and military procurement efforts.

"Together these documents make a powerful case that Iran had an active weaponization effort prior to 2004 [though] it is important to note they do not encompass the full scope of work required," concludes an analysis by the Institute for Science and International Security (ISIS) in Washington.

"This alleged research, and Iran's refusal so far to really engage the IAEA in a serious discussion about it, is at the heart of whether its nuclear program is peaceful," writes Jacqueline Shire, one of the authors of the ISIS analysis, in a separate summary. "My concern is that Iran's seeming insistence on adhering to the letter but not the spirit of safeguards … can create the perception, if not the reality, that it has something to hide."

"Because this can lead countries to take preemptive action with … disastrous consequences," says Ms. Shire. Iran should be encouraged "to be as open as possible...."

According to a US National Intelligence Estimate report issued last December, Iran halted a nuclear weapons program in fall 2003. The documents now being examined by the IAEA are not dated later than March 2004. "I don't think there is anything in [the documents] that would challenge substantially the NIE claims," says a Western diplomat in Vienna close to the IAEA. But the initial reports were, "as always, a bit breathless."

In fact, the IAEA report notes that, since March 2007, Iran has permitted 14 unannounced inspections. But only in April did it agree to address the "alleged studies." It has not given access to key people and places, and its detailed reply to questions only emerged on May 23, too late to be included in the report.

"If it really had been the golden ring, perhaps we would have heard more about it," says the Western diplomat. "It's a cross-checking. It's the usual sort of gumshoe detective work which is the elimination of leads. But in order to do that you've got to have the access."

But there is a history of imperfect intelligence tips. A report in the Los Angeles Times last year quoted a senior diplomat at the IAEA saying that the CIA and other Western spy agencies had been giving sensitive information, but that "since 2002, pretty much all the intelligence that's come to us has proved to be wrong."

The story said US officials "privately acknowledge" that much of the evidence they had on Iran – including the detailed designs described in the current IAEA report, reportedly taken from a laptop stolen in Iran –"remains ambiguous, fragmented and difficult to prove."

The current IAEA report says the information "appears to have been derived from multiple sources over different periods of time, is detailed in content, and appears to be generally consistent." But it also noted that the IAEA "was not in possession" of many of them, and so could not show them to Iran.

"Perhaps it's like Iraq, where the intelligence wasn't shared because the intelligence wasn't there," says the Western diplomat in Vienna. "Certainly there are some people who say this is getting a bit like the pre-Iraq war. [When] finally the inspectors were there and investigated, of course none of the claims stood up."

While US officials say the latest IAEA report is proof of Iran's "stonewalling," and "failure" to answer questions, Iran says it "attests to the exclusively peaceful nature" of Iran's nuclear program.

"Iran's goodwill and proactive cooperation with the IAEA far beyond its treaty obligations – as reflected in the IAEA reports – attests to the fact that the allegations made by certain countries [are] totally baseless," the Iranian mission to the UN said in a statement.

For connoisseurs, the multiple readings are no surprise. "Parsing the language used in UN or IAEA documents is an art in and of itself," says Shire, speaking in an interview from Princeton, N.J. "These are not documents that are written in Obama, McCain, or Clinton campaign style, where headlines and soundbites are really clear and come through."